Lithium-ion batteries (Li-ion) have become essential for many applications. Li-ion cells have many desirable characteristics, such as high efficiency, a long cycle life, high energy density, high power density and high charge/discharge capability. Due to these characteristics, Li-ion based battery systems have been used in many applications over the last few decades, such as consumer goods, industrial applications, electric vehicles (EVs), and more recently in energy storage applications, to make renewable energy more versatile, whether for houses with PV systems or utility-scale systems to manage the energy of a small city.
To operate in high power/energy applications such as EVs and stationary storage applications, an enormous amount of power, a thousand times higher than that of a smartphone, is required. That is why these applications need anywhere from dozens of battery cells up to thousands per device, in the form of a battery pack.
Battery packs are any number of individual Li-ion batteries arranged to provide the necessary power to the electronic devices. Li-ion battery packs generally include six main components: (1) Li-ion battery cells, (2) a battery management system (BMS) (3) a thermal management system, (4) safety components, (5) electrical interconnections and (6) housing.
The main driver for battery pack applications is the growing EV market. The EV market is booming, mainly due to the need to significantly reduce the average vehicle fleet CO2 emissions to match government targets and thus avoid hefty penalties.
The industry’s compound annual growth rate (CAGR) for battery packs will be more than 30 % for the next five years. This is linked to regulation changes, battery cost reduction, new market needs, and also the availability of key technologies. The latest report from Yole Développement (Yole), “Li-ion Battery Packs for Automotive and Stationary Storage Applications 2020”, provides all the details on the expected growth of the battery pack industry.
The 31.4 % total 2019-2025 CAGR for battery packs is mainly driven by battery EVs (BEVs), for which battery pack sales will surpass $67 billion by 2025. Sharply decreasing battery cell costs, together with continuously improving cell technologies, play in favor of using larger-capacity battery packs, further extending driving range, and thus more significant BEV deployment.
Additionally, the high level of air pollution in some big cities is driving the deployment of electric buses. Buses stop frequently and can potentially charge at each stop or terminus station, making them well-suited for battery power. Electric trucks can then benefit from battery and charging station technology development for buses. The use of electric trucks in the urban environment helps further reduce air pollution.
The stationary battery energy business is not the priority of most battery manufacturers – today, they are focusing mainly on electric mobility. Market growth for stationary battery systems is growing and is primarily driven by renewable energy sources, specifically photovoltaic and wind, and electricity grid regulation. EV and plug-in hybrid (PHEV) charging stations have emerged as a new exciting market driver for stationary battery energy storage solutions to smooth sharp electricity demand peaks while charging many EV/PHEVs at the same time.
As detailed in the report, big battery packs for grid applications will see the second-fastest growth rate, with 2019-2025 CAGR of 50.7%. Small stationary battery packs, driven mainly by residential photovoltaic-plus-storage installations and back-up energy supply, will also grow fast, with a 50.3% CAGR.
Battery cells form the central part of the global battery pack market studied in this report. They will represent 67 % of the total market value in 2025. Although the cell price in $/kWh will decrease further, the overall cell capacity per pack will increase, thus keeping the cell share within a battery pack at a high level.
The second most significant part of the battery pack market will be thermal management, followed by the BMS. The importance of better thermal management is growing with the increasing cell energy density and battery pack energy capacity as well as increasing needs for batteries compatible with speedy charging. As fast charging leads to high energy generation in a battery pack, enhanced heat dissipation and temperature regulation becomes crucial. The importance of the BMS is growing with increasing requirements to determine remaining battery capacity accurately, and with growing cell and pack energy capacities. An enhanced BMS also allows better use of the energy stored in a battery pack, thus reducing the need for battery pack capacity increase.
Battery pack component innovation will increasingly be driven by needs for fast charging.
But how can companies differentiate themselves in such a highly dynamic market? According to Yole’s analysis, there is no big technology breakthrough expected in coming years regarding battery cells and other battery pack components. The main trends will involve existing technology solutions, which will be further improved and more widely deployed. Technology and cost improvement will be steady.
Yole Développement has identified that battery pack suppliers face significant challenges from newcomers attracted by the fast-growing market, the dominant position of some cell suppliers, and substantial price pressure on all battery application segments.
Most battery pack suppliers are battery integrators, especially carmakers. They purchase battery cells mainly from leading suppliers and build their battery pack by integrating them with a BMS, heating/cooling systems, electrical interconnections, safety components, and housing. The carmakers are becoming increasingly intrusive in battery cell design and, in some cases, also in cell manufacturing. Instead of purchasing cells, some battery integrators purchase battery modules directly, and they integrate modules into battery packs. The modular battery pack approach enables further manufacturing cost reductions and keeps the design flexibility for battery packs. Battery integrators can increase their differentiating added value further by carefully designing the battery pack, and choosing components including the BMS, thermal management solutions, safety devices, electrical interconnects, housing, and assembly.
There are many new partnerships, joint ventures, and acquisitions ongoing within the supply chain to reinforce the companies’ position, secure access to strategic materials such as lithium and cobalt and battery cells, ensure growth, and to facilitate more accessible entries into the new markets.
Our market forecast has been made during the outbreak of coronavirus disease 2019 (COVID-19). The impact of this virus on the automotive and battery industry is significant. It is hard to evaluate how long this crisis will last and how its duration will negatively impact the manufactured volumes of conventional vehicles and EV/PHEV.
The battery pack is the place where industrial companies can best differentiate themselves by adding value to batteries. The new Yole report Li-ion Battery Packs for Automotive and Stationary Storage Applications 2020, analyses how this will occur, provides the market and technology trends, and describes the strategy of the leading players.
Shalu Agarwal, PhD. is Power Electronics and Materials Analyst at Yole Développement (Yole),within the Power & Wireless division. Based on Seoul, Shalu is engaged in the development of technology & market reports as well as the production of custom consulting studies.
Shalu has more than 10 years’ experience in Electronic Material Chemistry. Before joining Yole, she worked as a project manager and research professor in the field of electronic materials, batteries and inorganic chemistry.
Shalu Agarwal received her master’s and Ph.D. degree in Chemistry from the Indian institute of Technology (IIT) Roorkee (India).
Li-ion Battery Packs for Automotive and Stationary Storage Applications 2020
The battery pack component market continues to be driven mainly by electric vehicles.
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